Value Investing Strategies of Warren Buffett and Benjamin Graham

Archive for May, 2008

A few days ago, 90 MBA students were at IMD Business School in Lausanne for an interview session by MBA Programme Director Benoît Leleux with his two guests Warren Buffett and Israeli family business ISCAR Chairman Eitan Wertheimer.

I have also compiled and rephrased some of the questions posed to Warren Buffett and his replies below.

How do you manage all your companies?

I don’t. The key to management is about getting things done by other people. I can’t run those business as I don’t know a thing about them. I have managers I don’t see for three or four years. On the other hand, there’s one I talk to every day. We have no company meetings.

Warren Buffett said that the Canadian dollar is likely to outperfom the U.S. dollar in coming years. He himself had bought a couple of billion dollars worth of Canadian currency some time ago. However, he regreted that he didn’t buy more and kept them longer. He also continues to hold the Brazilian real.

It appears the federal government is likely to follow policies that will make the dollar even weaker. Warren Buffett continues his bearish stance on the U.S. dollar but does not feel the need to hedge on other currencies.

As a result of the weakening U.S dollar, Warren Buffett said he was happy to invest in overseas companies as currencies in those countries are not likely to decrease relative to the U.S. dollar.

Last Saturday morning at Berkshire Hathaway’s annual meeting, CEO Warren Buffett and vice chairman Charlie Munger answered questions from the Berkshire shareholders. Here are some of their comments.

On Future Returns

Buffett: We would be very happy if we earned 10%, pre-tax. Anyone that expects us to come close to replicating the past should sell their stock; it isn’t going to happen. We’ll get decent results over time, but not indecent results.